WinWin Issue 43
Harnessing 5G for a Faster and More Reliable Future for du and Our Customers
--Add life to life. As an early player in 5G technologies, du has transformed its business model to become one of the leading players in the United Arab Emirates (UAE) by offering its retail and commercial customers an inexpensive, reliable and world-class mobile and broadband network based on 5G. Karim Benkirane, Chief Commercial Officer (CCO) of du, spoke to WinWin Live at MWC 2023 about how du uses innovative thinking and technologies to establish deep roots in new markets such as smart offices, government, and the digitalization of industry.
In 2019, du cemented itself firmly in the history books by becoming the first to roll out 5G services in the UAE market. As one of the top regional mobile players, we've been developing a wide array of services that include home broadband, fixed services, IPTV and much more. In the third quarter of 2022, we increased our mobile and fixed service revenue by 10.5% and 22.2%, respectively, and our net profit grew by 12.7%. And with more than AED 2 billion in service revenue generated over the past five consecutive quarters, our profitability continues to improve year-on-year.
High expectations from a savvy market
Operating in such a highly sophisticated and competitive market, du needs to stay firmly in the saddle when it comes to understanding what our customers want and expect from us. To offer our readers a better context and perspective of where we are coming from, let's consider what modern Dubai has achieved since the founding of the UAE. Whether it's the world's first seven-star hotel, tallest building, or the biggest shopping mall, we've built it and projected this image of innovation and scale to offer visitors an experience they'll never forget. The same applies if you come across one of our stores or when you interact with our services — it must be the best or nothing. The customer is at the center of everything we do, and whenever someone thinks about 5G, they should think of du.
Back in 2015, du opted for a corporate strategy that focused on investing heavily in 5G network infrastructure development, and in 2019 we officially brought this to market. By adopting 5G early on, we were able to identify a new segment of the market, and added further value by addressing connectivity issues for homes that lack fixed broadband. The majority of the UAE is highly saturated when it comes to fiber, yet two years ago approximately 70% of households were utilizing fiber-based services. The reason for the difference was mostly attributed to different lifestyles and needs. Through the development of our Home Wireless product, fixed wireless access (FWA) 5G has enabled wider audiences to be connected at higher speeds, and it has also helped us grow our mobile business and significantly shortened the time to market (TTM).
One unexpected result from our pursuit of home broadband services was the creation of an environment where both fiber and 5G Home Wireless can coexist and even complement each other. In addition to this, we have developed Office Wireless to address the needs of small enterprises who can also use FWA 5G. This meets the basic need of fixed broadband so that commercial customers can have access to high speeds and low latency. To date, our 5G network has reached 95% coverage for populated areas.
Without a shadow of a doubt, 5G is unequivocally the way forward for all telcos. The decision that du made three years ago to invest heavily in this technology is paying dividends today, and this is just the beginning of our success story.
du is relying on the adoption of devices and is already witnessing more and more users moving from 4G to 5G devices, which is helping us increase traffic. On the fixed side, CPEs such as routers are becoming more affordable, which in turn is allowing du to gravitate towards FWA and increase the movement of traffic to 5G, delivering a better experience for the customer. When it comes to 5GtoB, we are exploring more proof of concepts (POCs) and use-cases in the transportation, energy, manufacturing sectors, aiming to be a key enabler for those verticals to ensure we help our customers establish an ecosystem in the B2B and B2G segments.
The migration of 2G to 3G to 4G and to 5G has been gradually gaining momentum over the last few years, and only recently has skyrocketed, placing us in a very favorable position. We believe that this will continue at even higher rates as the cost of 5G is lowered and more users experience a paradigm shift in terms of the benefits and experience that they are exposed to.
With the advent of the 5G leased lines, not only will this complement fiber in terms of high speed and low latency, but it will also act as an excellent foundation for businesses and industries to build on. At present, du is exploring multiple use-cases with local companies in the UAE such as DEWA, as well as smart warehousing in which we aim to provide fully integrated solutions like automation, optimization and other innovative features.
Words of advice from our viewpoint and experience
There is no doubt that both the government and regulators have been remarkably ambitious and supportive in creating an ideal incubation environment for the early development of 5G in the UAE. Creating an ultimate experience for both B2B and B2C customers will not only reduce the churn rate, but will also help us expand into new markets and strengthen our balance sheet in the long term, raising du's global profile and customer base.
Compared to other developed countries, the UAE is quite a unique environment where the government takes the lead in innovation, and then the private sector follows. Here at du, we wholeheartedly encourage other players to take the plunge and not only become a key driver for innovation in the telco sector, but an industry leader, and further continue the commitment for improving the lives of the customers we all serve.